Colocation vs. On-Prem Infrastructure: What’s Best for Your Business?

Choosing the right infrastructure for your business is more critical than ever. As companies grow and adopt new technologies like AI, big data, and IoT, the demand for scalable, secure, and reliable infrastructure increases. 

Two primary options stand out for housing IT infrastructure: colocation and on-premises infrastructure. 

But which is the best fit for your business? 

Here’s a breakdown of both options to help you make an informed decision.

What is Colocation?

Colocation is a service where businesses lease space in a professionally managed data centre to house their own servers and networking equipment. With colocation, you maintain control over your hardware while benefiting from the advanced infrastructure, security, and connectivity provided by a dedicated data centre facility.

At Lunar Digital, our colocation services offer a secure, carrier-neutral environment with 24/7 support and a 100% uptime guarantee, giving businesses the peace of mind they need to focus on growth without worrying about infrastructure challenges.

What is On-Premises Infrastructure?

On-premises (on-prem) infrastructure refers to the servers, storage, and networking equipment located on a company’s own premises. This typically involves setting up and managing an internal data centre within your organisation’s building. With on-prem, businesses have complete control over their infrastructure, but they also bear full responsibility for maintenance, security, and scalability.

While on-prem infrastructure can be an appealing option for companies that require full control over their hardware, it also comes with significant overhead costs and requires a skilled team to handle maintenance, upgrades, and security.

Comparing the Benefits: Colocation vs. On-Prem Infrastructure

Let’s dive into the key factors to consider when choosing between colocation and on-prem infrastructure.

1. Cost Efficiency

Colocation

Colocation offers predictable costs with minimal upfront investment compared to building and managing an internal data centre. By leveraging the infrastructure of a colocation provider like Lunar Digital, businesses avoid the costs associated with real estate, construction, and extensive maintenance. This makes colocation a cost-effective solution, especially for businesses looking to scale.

On-Prem

On-premises infrastructure involves significant capital expenditure, including the cost of building or renovating a data centre, purchasing hardware, and maintaining the environment (cooling, power, and security). For companies with fluctuating infrastructure needs, these costs can quickly escalate, making on-prem infrastructure a costly solution in the long run.

2. Scalability and Flexibility

Colocation

With colocation, scaling is straightforward. Businesses can add more rack space, power, and connectivity as needed without the constraints of a physical building. Lunar Digital’s facilities are designed to grow with your business, offering flexible solutions and significant capacity to meet evolving demands.

On-Prem

Scaling on-prem infrastructure can be complex and costly. Adding capacity often requires additional physical space and infrastructure upgrades, which can be time-consuming and expensive. On-prem may be suitable for businesses with fixed requirements, but it can limit flexibility for those expecting rapid growth.

3. Reliability and Uptime

Colocation

Data centres like Lunar Digital are equipped with redundant power supplies, advanced cooling systems, and high-speed network connections to ensure consistent uptime. Our 100% SLA uptime guarantee means that your business is protected from unexpected outages, helping to maintain business continuity and reduce potential revenue loss.

On-Prem

Maintaining high uptime with on-prem infrastructure can be challenging, as businesses are responsible for building and managing redundancies themselves. This can be resource-intensive and often lacks the level of resilience provided by a dedicated data centre. On-prem solutions may expose businesses to increased risks of downtime if backup systems are insufficient.

4. Security and Compliance

Colocation

Colocation providers prioritise security with multi-layered physical and cyber protection measures. Lunar Digital’s facilities are accredited with ISO27001, ISO9001, ISO14001, and Cyber Essentials certifications, ensuring compliance with industry standards. This allows businesses to meet regulatory requirements without having to invest heavily in security infrastructure.

On-Prem

With on-prem infrastructure, the responsibility for physical and cybersecurity rests solely on the business. Building a secure, compliant environment requires significant investment and expertise, which can be challenging for companies without specialised staff. On-prem infrastructure may not be ideal for organisations operating in highly regulated industries unless they have dedicated resources to maintain compliance.

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5. Control and Visibility

Colocation
With colocation, businesses retain full control over their hardware while benefiting from professional data centre management. You have direct access to your equipment for maintenance and configuration, and with Lunar Digital’s carrier-neutral facilities, you have the freedom to choose your preferred network providers. This balance of control and managed services makes colocation a popular choice for companies that value oversight without operational burdens.

On-Prem

On-prem infrastructure offers complete control over your environment, which can be advantageous for organisations with highly specific requirements. However, this control comes with the responsibility for all aspects of management, including monitoring, troubleshooting, and ensuring infrastructure health. This can be resource-intensive and may divert focus from core business initiatives.

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When to Choose Colocation

Colocation is an ideal choice for businesses that require scalability, security, and cost efficiency without the responsibility of managing a full data centre. It’s especially beneficial for companies looking to expand quickly, comply with industry regulations, and maintain high uptime without significant capital investment. With colocation, you get the best of both worlds: control over your infrastructure and the support of a professional data centre provider.

At Lunar Digital, we offer customisable colocation solutions designed to meet your specific needs. Our facilities provide high-speed connectivity, 24/7 technical support, and access to a vast network of global carriers, enabling your business to grow confidently and securely.

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When to Choose On-Prem Infrastructure

On-prem infrastructure may be suitable for organisations that need complete control over their environment, have specific regulatory requirements, or prefer to keep everything in-house. However, this option is typically more suited to large enterprises with dedicated resources to manage the complexities of an internal data centre.

If you have long-term stability in your infrastructure requirements and the resources to handle maintenance, on-prem can offer the control and privacy some businesses seek. But keep in mind, this choice requires significant investment and ongoing management.

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Conclusion: Choosing the Right Fit for Your Business

When it comes to choosing between colocation and on-prem infrastructure, the decision should be based on your business’s growth objectives, budget, and operational priorities. Colocation offers scalability, cost-effectiveness, and professional support, making it a versatile solution for businesses of all sizes looking to future-proof their infrastructure.

At Lunar Digital, we’re here to help you make the best choice for your business. Whether you’re ready to transition to colocation or exploring options to optimise your existing infrastructure, our team of experts can guide you every step of the way.

Get in touch with us today to learn how colocation can empower your business to thrive in a digitally driven world.

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